SAMPLE
written conflicts of interest policy that should be incorporated within the company
employee manual. Conflicts
of Interest Company
policy prohibits conflicts between the interests of its Directors or employees
and the Company. A complete definition of what constitutes a conflict of interest
is difficult. There are some situations, however, that will always be considered
a prohibited conflict of interest. These situations occur when a Director or employee
or any person having a close personal relationship with the Director or employee:
•
Obtains a significant financial or other beneficial interest in one of the Company's
suppliers, customers or competitors without first notifying the Company and obtaining
written approval from the Chief Executive Officer or his or her designee;
• Engages in a significant personal business transaction involving the Company
for profit or gain, unless such transaction has first been approved in writing
by the Chief Executive officer or his or her designee;
• Accepts money,
gifts of other than nominal value, excessive hospitality, loans, guarantees of
obligations or other special treatment from any supplier, customer or competitor
of the Company (loans from lending institutions at prevailing interest rates are
excluded);
• Participates in any sale, loan or gift of Company property
without obtaining written approval from the Chief Executive Committee or his or
her designee;
• Learns of a business opportunity through association
with the Company and discloses it to a third party or invests in or takes the
opportunity personally without first offering it to the Company.
• Uses
corporate property, information, or position for personal gain; or
•
Competes with the Company.
A
conflict of interest may arise because of outside directorships, personal use
of Company property or obtaining Company services for personal benefit.
"Person
having a close personal relationship with the Director or employee" refers
to the Director's or employee's spouse, parents, children, siblings, mothers and
fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, any person
living in the same house with the Director or employee or any business associate
of the Director or employee. Periodically
the Company requires certain employees to certify to the Company that they have
complied with all requirements of the Code of Business Conduct. Disclosure of
a particular situation that may be a conflict of interest does not mean that the
Company will consider it to be substantial enough to be prohibited. Each situation
will be considered on an individual basis.
Code of Business Conduct:
Conflicts of Interest "Company
Name"
CORPORATE POLICY Date:
XX, XX, XXXX
PURPOSE
This
Policy establishes guidelines and procedures regarding timely and proper disclosure
of possible conflicts of interests which an Employee or Director may have in connection
with job duties and responsibilities in order that management may review and approve
each situation as necessary to protect the best interests of the Company and its
responsibilities as a public company. POLICY
1. The Company prohibits conflicts of interest unless specifically approved by
the Chief Executive Officer or his or her designee as provided below since Directors
and Employees have a duty to the Company to advance the Company's legitimate interests
when the opportunity to do so arises.
2. The Company has always been concerned with outside business interests of its
Directors and Employees that might possibly conflict with the interests of the
Company. An adequate definition of what constitutes a conflict of interest is
most difficult. However, the Company expects and requires Directors and Employees
to be honest and ethical in the handling of actual or apparent conflicts of interest
between personal and business relationships. The minimum standard is that required
by law. There
are certain situations which the Company will always consider to be conflicts
of interest. These occur if the Director or Employee, or any other person having
a close personal relationship with the Director or Employee:
a. obtains a significant financial or other beneficial interest in one of the
Company's suppliers, customers or competitors without first notifying the Company
and obtaining written approval from the Chief Executive Officer or his or her
designee;
b. engages in a significant personal business transaction involving the Company
for profit or gain, unless such transaction has first been approved in writing
by the Chief Executive Officer or his or her designee;
c. accepts money, gifts of other than nominal value, excessive hospitality, loans,
guarantees of obligations or other special treatment from any supplier, customer
or competitor of the Company (loans from lending institutions at prevailing interest
rates are excluded);
d. participates in any sale, loan or gift of Company property without obtaining
written approval from the Chief Executive Officer or his or her designee;
e. learns of a business opportunity through association with the Company and discloses
it to a third party or invests in or takes the opportunity personally without
first offering it to the Company.
f. uses corporate property, information, or position for personal gain; or
g. competes with the Company. "Person
having a close personal relationship with the Director or Employee" refers
to the Director's or Employee's spouse, parents, children, siblings, mothers and
fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, any person
living in the same home with the Director or Employee or any business associate
of the Director or Employee. Outside
directorships may create a conflict of interest situation. The Company's policy
concerning outside directorships is stated separately in the employee manual. The
use of Company property or obtaining of Company services for personal benefit
may create a conflict of interest situation. The Company's policy on these matters
is stated separately in the employee manual.
3. As an enhanced conflict
of interest provision, the Company prohibits personal loans or extensions of credit
by the Company to Directors and executive officers of the Company to the extent
such loans are not directly related to and in the ordinary course of the Company's
business.
4. If any Director or the Chief Executive Officer of the Company has a possible
conflict of interest, the situation should be promptly and fully disclosed to
the Audit Committee of the Company. If any other Employee has a possible conflict
of interest, the situation should be promptly and fully disclosed to his or her
manager or supervisor. It is the responsibility of the manager or supervisor to
obtain the approval of the Chief Executive Officer or his or her designee as required
by this Policy.
5. The Company shall have on file a statement of compliance from each key Employee
who can direct or influence the use or disposition of any significant amount of
funds or other assets of the Company. The disclosure of a financial or other beneficial
interest does not mean that the Company will deem it significant or substantial
enough to be prohibited. Each case will be decided on an individual basis.
6. The Director - Audit Services of the Company will ensure that all Employees
subject to this requirement submit annually a completed copy of a statement of
compliance. The Director - Audit Services will also be responsible for notifying
the Chief Executive Officer and the Audit Committee of the Board of Directors
that such statements are on file as well as for notifying the Chief Executive
Officer and the Committee when significant exceptions are reported.
PROCEDURE
1. A completed statement of compliance will be obtained annually from all key
Employees subject to this requirement. In any instance where the number of key
Employees makes this requirement burdensome, statements may be obtained from key
Employees during the months which include their employment anniversary dates or
on such other schedule as may be approved in writing by the Chief Executive Officer.
2. The completed statements will, subject to the Company's policy on document
retention, be retained on file in hard copy, electronic format, microfilm or other
media as directed by the Director - Audit Services and a written report setting
forth any exceptions included in such reports will be furnished to the Chief Executive
Officer no later than January 31 of each year.
3. Statements of compliance will be completed by all Employees. Supplemental reports
for such Employees will be obtained annually or as the policies are changed.
4. The statement of compliance selection and reporting process will be reviewed
annually by the Director - Audit Services for adequacy and compliance with this
Policy.
5. Results of the reporting process and the nature of significant exceptions,
if any, will be communicated annually to the Chief Executive Officer and to the
Audit Committee of the Board of Directors by the Director - Audit Services.
Approved
as revised: Board of Directors
("Date Approved")
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